Wednesday, December 5, 2007

The NDP are basing their income trust tax policy on someone described by the courts as "frivolous and vexatious"

By Brent Fullard

The NDP are clearly lacking in research capabilities of their own, That was proved abundantly obvious when Judy Wasylycia-Leis made a claim in Parliament on May 10, 2007 that CAITI had had donated $282,000 since 1993 to the Liberal party and $53,700 to Liberal leadership contenders in 2006. Not only does CAITI have a strict policy against making any political donations, direct or directly, at the time of this claim, CAITI had only existed for less than 4 months. That didn’t stop former used car salesman and Conservative MP Dean Del Mastro from parroting the same claims five minutes later.

Now we know how false claims like tax leakage get started and how others are quick to blindly jump on the band wagon. Emphasis on the word “blind”. Much like the press in Canada.

Another example of the NDP’s ineptitude at research occurred at the NDP gathering I attended on the subject of the SPP (Security and Prosperity Partnership) on November 24. The NDP’s depth of knowledge on this subject by their “in house expert on the SPP, Peter Julian, could easily be superseded by spending 2 hours of googling SPP and listening to Lou Dobbs on CNN . Peter Julian admitted that the NDP are still in the process of putting the SPP puzzle together and would welcome receiving information from people in the audience.

This form of trolling for information obviously makes the NDP susceptible to people like Diane Urquhart, the self professed “independent analyst”, as they are happy to “out source” their research on virtually any fact based topic. Not sure what “independent analyst” means, as Diane states she has no clients. If that’s the case, then she is only representing herself as an individual investor.

I do know, however that the NDP have bought Diane’s arguments about income trusts, hook, line and sinker. Diane also seems to get a lot of press lineage for someone who has a questionable credentials. The NDP are so fond of Diane Urquhart, that they saw to it that she testified no less than three times before the Finance Committee on the matter of income trusts. I am only aware of one other person who testified more than once, and that was Dennis Bruce who testified twice. He however, as Vice President with HLB Decision Economics, was the only person who worked with the Department of Finance to create with them the tax leakage model and published the definitive study that lays to shame the false allegations of tax leakage entitled Tax Revenue Implications of Income Trusts.

Meanwhile the NDP are in bed with the “frivolous and vexatious Diane Urquhart”. At least according to the courts. So too it seems are the Conservatives

Here was the glowing introduction afforded Diane Urquhart by Mr. Dean Del Mastro (Peterborough, CPC):

"Mrs. Urquhart, I'm just reviewing your resumé a little bit. You've got quite of bit of experience in relation to investment and you are certainly a professional witness before this committee. I appreciate your being here.”
It is clear from Diane’s resume that she has engaged in resume inflation and resume puffery. Despite what her resume says, at no point was Diane Urquhart the Managing Director of Equities Research and Institutional Equities at Burns Fry Limited, since during Diane’s time at Burns Fry, which ended in 2004, the title of Managing Director did not exist at the firm. No one had such a title. Nor did Diane “Co-lead the daily operations of 175 research, sales and trading personnel” at Burns Fry. Such a construct did not exist, as Diane had no responsibility for the institutional Sales and Trading personnel at Burns Fry. I can assure you, since I also worked at Burns Fry from 1991 to 2002, that if she did, they all would have quit. The individual responsible for that function was Barry Cooper. Diane reported to him as the manager of the Research Department. I have confirmed this with other people at Burns Fry who were there at the time and who were very aware of what Diane did and did not do. Diane obviously harbored desires to be the Head of Research, Sales and Trading and launched at the time what can only be best described as a “coup” against Barry Cooper that failed miserably. She left shortly thereafter.

Diane also describes on her resume that after leaving Scotia Capital Markets in 1998 that she was for the period from 1999 to 2001 a Venture capital investor in, an internet services consolidator that was sold to Technovision Systems Inc. in December 2000.

Diane however fails to describe how she went on to lose about all of her $1.19 million investment in Technovision that she received in exchange for her 25% ownership of and sought to recover her failed investment in actions she brought in the BC and Ontario courts and involving the securities commissions in BC and Ontario. The details are available at the Ontario Securities Commission

The details of these legal proceedings are not very flattering of Diane Urquhart as an investor or of her business acumen. Why the NDP are relying on her views on income trust only goes to discredit the NDP’s own credibility.

The Ontario Court ruled:
  • “We find that this section 104 application on behalf of the Applicants is out of time and frivolous and vexatious, and in the words of the Honourable Justice Pitt, "this is precisely the kind of proceeding that motions judges are obliged to stay or dismiss on grounds of res judicata, issue estoppel, abuse of process and on the ground that they are frivolous and vexatious."
  • This is a private dispute and should be resolved in the civil courts. Failure to succeed in the civil court should not be the basis for an application to the Commission to change a private dispute into a matter of public interest.
  • The application of Urquhart is therefore dismissed.”
The NDP are needlessly setting themselves up
Tax Revenue Implications of Income Trusts